The Business Model Of Crop Insurance

Planet Money:

The federal government spends about $7 billion a year on crop insurance for U.S. farmers. Policies are sold by private companies, but the government sets the rates, so the companies can't compete on price.
That means the guys who sell crop insurance have to find other ways to compete. They try to out-nice each other. They are very charming. They wear polo shirts depicting hobbies. They have fun nicknames. And they know everyone in town.
  Don "Dizz" Biefelt is the most interested, friendly neighbor you can imagine. He's 82 years old, and he sells crop insurance in Anchor Illinois.
I sat with him on Anchor's one public bench. His customers were everywhere. That guy over there, working on a truck — he's a customer. (And, by the way, the customer's wife just had a gallbladder out, Dizz says.) The guy in that house over there is another customer, as is the guy down at the end. Dizz knows their mothers, their nicknames, their wives' digestion problems.
But Don has competition. Brent "Hondo" Honneger works a few miles down the road. Brent also wears polo shirts and is charming and knows everyone.

She forgets to point out that people like their crop insurance agents because the crop insurance companies don't take your premiums then try to screw you out of crop insurance payments when you are owed like most of the other insurance companies do.  Instead, you turn in your yields, and if you are due money, they send you the check.  They really have no reason not to, because the government backs up the payments.  Overall, it is like any other government privatization plan, insiders make money and regular taxpayers foot the bill.  The government could easily do the same thing for less by leaving the private companies out, but that wouldn't fly with Republicans.